GOLD Analysis – September 02, 2021

Symmetrical Triangle Pattern

After reaching a high of $1822.60 and a low of $1810.65, gold prices settled at $1815.55. The price of gold remained unchanged throughout the trading session on Wednesday. Investors remained cautious about placing large trades as they prepared for critical U.S. jobs data that could impact the Federal Reserve's tapering policy.

On Wednesday, the U.S. Dollar Index, which gauges the dollar's value against a range of six major currencies, maintained its bearish trend and fell for the fourth straight session. The DXY plummeted to 92.3, its lowest level in almost a month, before recovering some of its losses and closing the day at 92.5. Meanwhile, gold prices should have increased due to DXY's bearish trend, but the precious metal stayed under pressure and remained flat throughout the session.

On a 10-year Treasury note, the yield also declined on Wednesday, settling at 1.29 percent, after the U.S.'s main jobs statistics fell short of forecasts. According to the ADP National Employment Report, private firms in the United States employed many fewer people in August than expected. On the other hand, the greenback gained strength due to an increase in manufacturing activity in the United States.

The dollar's value affects gold prices because it makes bullion cheaper or more expensive for individuals who hold foreign currencies. Gold had little choice but to remain flat throughout Wednesday's trading session due to mixed macroeconomic data from the United States.

On the statistics front, the ADP Non-Farm Employment Change fell to 374K in August, versus an anticipated 640K, weighing on the U.S. dollar and supporting gold prices at 17:15 GMT. The Final Manufacturing PMI for August was unchanged at 18:45 GMT, with predictions of 61.1.

The ISM Manufacturing PMI for August rose to 59.9 from 58.5 expected at 19:00 GMT, bolstering the U.S. dollar, which was weighing on the yellow metal. Construction spending was constant at 0.3 percent, as forecast. The ISM Manufacturing Prices fell to 79.4 in August, down from an expected 84.1, putting pressure on the currency and supporting gold.

After receiving a boost from the Fed last week following Chair Jerome Powell's speech, the precious metal likewise remained flat during the day. Despite the possibility of tapering starting this year, he stated that the central bank would be cautious when raising interest rates. He began to slip away from the predictions for a substantial amount of NFP jobs data, which is due on Friday.

Investors were also perplexed about making major purchases in precious metals due to the mixed two-important data about ADP job creation and the ISM Manufacturing PMI, which left gold with flat momentum.

GOLD Intraday Technical Level

Support Resistance

1809.94 1821.89

1804.32 1828.22

1797.99 1833.84

Pivot Point: 1816.27

GOLD - Technical Outlook

On Thursday, the precious metal continues to consolidate in a narrow trading range of 1,815 – 1,808 level. Gold is trading with a neutral bias at the 1,812 level. However, the metal entered the oversold zone, and now it's experiencing a bearish correction below 1,814 resistance levels. On the lower side, gold's immediate support prevails at 1,807, and 1,795 levels. Furthermore, the bearish breakout of the 1,795 level exposes gold prices towards the 1,785 level.

On the higher side, the breakout of the 1,814 level can expose the metal towards 1,821, 1,829 and 1,841 levels. On the hourly timeframe, the RSI level is holding in a selling zone. Thus, the odds of a selling bias remain strong until the 1,807 level. The bearish bias remains strong below the 1,814 level and vice versa. All the best.